Shopping Centers Today

SEP 2018

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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S E P T E M B E R 2 0 1 8 / S C T 19 "The key here for retailers is to ensure that they are benefiting from this partnership as well," said Kotlyar. "They need to understand that Amazon is not a lifeline and any part- nership with Amazon has to be stra- tegic, and [that] they have to under- stand where the benefit lies for them." Certainly, Amazon can operate that same store-in-a-store and return-cen- ter model within its own Whole Foods stores. But partnership with other retailers allows Amazon to extend its reach beyond its roughly 350 Whole Foods stores across the U.S., Canada and the U.K. And Amazon continues to test a variety of ideas, in its own brick-and- mortar stores and through retail part- nerships. "Amazon has the financial wherewithal to test whatever it wants to do, and there has been an increasing number of competitors that are trying to partner with Amazon," said Feldman. Best Buy and Amazon announced a partnership in April to bring the next generation of Amazon's Fire TV Edition smart TVs to customers in the U.S. and Canada. As a first step in this venture, Best Buy began selling 4K and high-definition Fire TV mod- els from Toshiba and Insignia earlier this summer. Retailers have been introducing third-party-operated store-in-store shops and services for years. JCPenney introduced its first store-in-store Sephora stores a dozen years ago. Walgreens announced an alliance with FedEx last year in which FedEx drop- off and pickup locations would be introduced at thousands of Walgreens stores in the U.S. "I think these nontraditional part- nerships where retailers get together are going to become more and more the norm," said Kotlyar, "because at the end of the day, retailers are looking for traffic, whether it is traffic online or within the brick-and-mortar stores." n For retailers, there are pros and cons to partnership with Amazon. The instances in which such an alli- ance can help generate additional foot traffic and incremental sales at stores are surely positive. "The partnership, especially with Sears, will bring both foot traffic and business into Sears that might not previously have been going to Sears," said Natalie Kotlyar, national leader of the retail and consumer-products practice group at New York City–based BDO. "I think that is an introduction of new customers and new potential buyers that Sears might not have seen." There is some downside risk too. Customers may walk into Kohl's and return very large and bulky items that take up a lot of space, and then walk out without making any additional pur- chases. "We also don't know the nature of any of the deals in terms of what cost each side is bearing, and how that's all going to play out," said Feldman. Amazon lockers at a Whole Foods store in New York City

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